Chapter 23: Market structure Flashcards
1
Q
Market structure
A
The conditions which exist in a market including the number of firms
2
Q
Competitive market
A
A market with a number of firms that compete with each other
3
Q
Normal profit
A
The minimum level of profit required to keep a firm in the industry in the long run
4
Q
Supernormal profit
A
Profit above that needed to keep a firm in the market in the long run
5
Q
Monopoly (in supply)
A
A market with a single supplier
6
Q
Barrier to entry
A
Anything that makes it difficult for a firm to start producing the product
7
Q
Barrier to exit
A
Anything that makes it difficult for a firm to stop making a product
8
Q
Scale of production
A
The size of production units and the methods of production used
9
Q
Sunk costs
A
Cost that cannot be recovered if the firm leaves the industry
